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05/03/2011

Can Poor Countries Afford Democracy?—Posner

I agree with Becker that wealth creates the conditions for democracy, but I would suggest a slightly more complex causal sequence: wealth creates the preconditions for liberty (i.e., rights), and liberty the preconditions for effective democracy.

As John F. O. Bilson explained in a 1982 article (Civil Liberty—An Econometric Investigation, Kyklos, vol. 35, pp. 94, 103), “Almost any reasonable theory of freedom would predict a positive correlation between freedom and real income. On the demand side, freedom must be considered a lux­ury good so that the re­sources devoted to the attainment of in­di­vidual freedom are likely to be greater when per capita in­come is high. On the supply side, it is undoubt­edly more costly to repress a wealthy person than a poor person and the need to do so is probably less acute.” As people become wealthier and therefore more self-confident, and education (another “superior good” in the economist’s sense (what Bilson calls a “luxury good”)—the demand for it is a positive function of income) becomes more widespread and secure property rights become more highly valued, and with society able to afford, as the demand for law and order grows, a sophisticated security apparatus (including an independent judiciary) that maintains law and order without creating destabilizing resentments, what Bilson calls “freedom” and I call “liberty” become established features of the society. Pretty soon, however, people want more than “negative” liberty, the protection of personal security and property rights; they want a say in the choice of their rulers—they want the right to vote; it is an expansion, or at least the illusion of an expansion, in their liberty in the broad sense of having control over one’s destiny to the maximum feasible extent.

For this progression to work, the distribution of income and wealth mustn’t be too skewed—if the entire wealth of a country is concentrated in a tiny class, the demand for rights by the people as a whole, or at least a large swatch of people, will be weak, if Bilson and I are correct that liberty is a superior good.

It is no surprise, therefore, that democracy emerged in countries like Great Britain, the United States, France, and Germany after—though often long after—a considerable degree of liberty in the narrow sense that does not include the right to vote had been obtained by the citizens of these countries as a result of the rise of a substantial middle class. (This leaves unexplained the democracy without liberty found in a few ancient polities, such as Athens.) Magna Carta and the English Declaration of Rights of 1689 long preceded English democracy, and when the U.S. Bill of Rights (the first ten amendments to the Constitution of 1787) was enacted in 1789 the Constitution provided a limited role for voting. Apart from limitations on who could vote, the only federal officials for whom the people could vote directly were the members of the House of Representatives. All other federal officials were either elected indirectly (Senators and the President and Vice President) or appointed (judges and executive branch officials).

Democracy without liberty—the ancient Athenian formula—is highly risky, since it is easy for the first elected officials to refuse to allow (or to rig) the next election. The rarity of such polities suggests that such a democracy is not an equilibrium. More important, while a country need not be wealthy to be democratic, democracy without liberty is an unsatisfactory form of government because of the instability to which it conduces that I’ve just mentioned. But liberty is expensive, so how realistic is it to suppose that a poor country can be effectively democratic? India is the principal exception (and its democracy was suspended during the 1975-1977 “state of emergency” rule by Indira Gandhi), but a misleading one, in light of India’s very long and successful colonial occupation by Great Britain that preceded independence, though democracy has been a flop in other former British dependencies, notably Pakistan, formerly a part of British India. Latin America has a long history of unstable democracy.

The normal evolution is from autocracy to democracy with liberty the intermediate stage. This has been the pattern (though not an unvarying pattern) not only in Europe, but also in East Asia. Yet liberty and democracy sometimes arrive at the same time, as they did in the former Soviet sphere. It will be interesting to see whether this happens in any of the North African and Middle Eastern countries in which people are rebelling against autocratic governments, or whether there will be an intermediate stage of non- or semi-democratic government combined with enlarged personal liberty. Although these countries (with the exception of the small oil-rich countries) are poor by Western standards, they are not so poor (as many African countries are) that they cannot afford to provide their citizens with liberty, the precondition to stable, functioning democracy.

Forecasts of the world’s population only a few years in the future are generally quite accurate because the number of births and deaths during the next few years are largely determined by the existing distribution of the number of people at different ages.mnbn

The court of appeals granted the plaintiffs’ petition and overruled the trial court’s order. The court of appeals employed the balancing test found in Valley Bank. The court first found the objectors met the criteria to establish the requested documents were an invasion of their privacy. The plaintiffs then demonstrated that the requested information was directly relevant to their claims and essential to a fair resolution of the lawsuit. Thus, the information was discoverable. The court of appeals found that the trial court’s failure to analyze each category of requested information under the standard of Valley Bank was an abuse of discretion.

I agree that the democracy is not only brought about through wealth in a nation. I believe wealth is only brought about through the cooperation of a nation to organize a state where prosperity is available to all. Therefore, I believe it is the opposite, that wealth can only be brought through democracy.

Having higher numbers of occupants per existing structure doesn't bode well for selling off the homes having fallen or about to fall into the laps of bankers.All of the sci-fi stories pointed to a shorter work week, more leisure time and industries developing around increased leisure time coupled with the income to enjoy it. We have nothing like that in place or even in mind. Instead those desperate for any kind of job are to work longer hours for less pay and be appreciative for their opportunity.

The Occupy Movement and everyone else worried about earnings inequality should be emphasizing the need to find ways to encourage more high school dropouts and high school graduates to get the required background and study habits so that they can, and want to, continue on for a college education.

As compared to the post-World War II era, Americans with high school diplomas today are much less likely to find manufacturing jobs, because there are 2-3 billion people in emerging economies with similar skills who are willing to work more cheaply in order to have a shot at attaining a middle class standard of living.